Should you buy or sell IronNet shares after plunging more than 30%?
- IronNet shares on Thursday plummeted more than 30% after announcing FQ3 results.
- The company announced its FQ3 results Wednesday after the close.
- IronNet’s quarterly revenue edged slightly lower, significantly missing analyst estimates.
On Thursday, IronNet Inc. (NYSE:IRNT) shares plunged by more than 30% after releasing its fiscal third-quarter results. The cybersecurity and defence company announced its most recent quarterly results Wednesday after the close, missing the consensus for analyst expectations on revenue.
IronNet posted a Q3 bottom line of -$2.22, incomparable to the analyst expectation of $-0.15. On the other hand, revenue for the quarter edged slightly lower by 1.4% from the same quarter a year ago to $6.9 million, substantially missing the consensus Street estimate by $4.89 million.
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IronNet also issued a full-year 2022 revenue guidance of $26 million, significantly lagging the Street forecast of $41.98 million.
Is it too risky to buy IronNet stock?
From an investment perspective, IronNet shares trade at a steep price-sales ratio of 15.12, making the stock less attractive to bargain hunters.
In addition, analysts expect the Virginia-based company’s bottom line to worsen by 15.70% this year, thus keeping off prospective growth investors.
Therefore, with the company’s top-line guidance for FY2022 substantially lagging Street estimates, it may be best to monitor the performance before betting on its exciting opportunity in the cybersecurity space.
Technically, IronNet shares seem to have recently completed a downward breakout from a descending channel formation in the intraday chart. As a result, the stock has nosedived into the oversold conditions of the 14-day RSI.
Therefore, investors could target potential technical rebounds at about $6.42, or higher at $8.29. However, given the current bearish pressure, the stock could decline deep into overbought conditions towards $3.03.